Avoid These 10 Car Dealership Scams

We’ll show you a solution that makes buying a car safe and easy. Read on.

Most Common Scams Targeting Buyers

Automobile dealers offer convenience but deploy tricks to squeeze every dollar from you. High-pressure sales tactics give them the upper hand in negotiations.

Don’t let their schemes leave you with empty pockets! Wise up to their tricks so you can buy your next ride safely. Even better, avoid dealer fees and markups by dealing directly with a private seller. PrivateAuto makes the private-party car transaction easy. Take control (and save a bundle) when you shop used cars for sale by owner.

If you’re going to buy your next car from a dealership, it pays to keep your eyes open. Not every dealer is out to scam you, of course, but be on guard for the following.

One: Loading Up The Contract Scam

Dealers sneak unnecessary add-ons into contracts, charging thousands of dollars without your consent.

Here are some things to look out for:

1. Extended warranties
2. Service contracts
3. Protection packages
4. Unwanted accessories

Combat these tactics by scrutinizing paperwork before signing. Remove unauthorized add-ons and adjust pricing. Reject loaded contracts and walk away.

Don’t become a victim of auto dealer fraud. Carefully review contracts to stop any packed pricing schemes. Or, skip the dealer entirely and buy a used car from a private seller.

Where is the Best Place to Buy a Car Privately?

Instant, fee-free, and secure payments via PrivateAuto Pay. Send up to $1M in the blink of an eye.
In-app messaging keeps your contact info private.
Test drive scheduling feature eliminates back-and-forth with the seller
In-app electronic signing of the bill of sale protects you and gives you a legal record

Found your dream car on Facebook Marketplace, Craigslist, or eBay Motors? DealNow lets you start a deal on another site and instantly transact anytime. Invite the seller to DealNow via a custom link you’ll create, and then enjoy a fast-track deal flow and proprietary infrastructure.

Start your transaction anywhere, finish it with DealNow

Two: Bait-and-Switch Pricing Scam

Shady dealers quote one price, then jack up the charges later when you’re ready to sign. The contract price is suddenly higher than the purchase price promised.

This scheme preys on customers who have already invested time negotiating. Faced with losing the deal, many get bullied into agreeing to the inflated costs.

Combat bait-and-switch pressure by getting all price quotes in writing upfront. Review the paperwork carefully before signing to ensure the price matches what was previously quoted. If they bump up the charges, be ready to walk away.

Three: Title Washing Scams

Title washing hides a salvage vehicle history. A fraudulent dealer “launders” titles by re-registering the cars in states that ignore salvage brands. This makes a branded title harder to detect.

But digital records still show the real story. Even when you are buying from a dealer, run a VIN check before buying to uncover title laundering and identify if the car has a salvage title.

Four: Advertising Fake Deals Scam

Fraudulent dealers advertise unbelievable deals on a few cars to lure you in. But when you arrive, they claim those cars are now sold. Then they pressure you to buy another higher-priced car instead.

Don’t take the bait. Walk away rather than accept a last-minute switch to a higher-priced car. Wise up to bait advertising tricks so you don’t get hooked. Research Kelley Blue Book values so you can’t be upsold easily.

It’s always a good idea to run the vehicle identification number through services such as NMVTIS to uncover any inconsistencies before buying.

Five: Lying About Credit Scores Scam

One of the most common dealer scams is where the dealers say that you have a bad credit score when in reality you don’t. This pushes you into their high-interest financing.

Here is how you can combat this:

1. Get a copy of your actual credit report and score first. Check all bureaus.
2. Shopping lenders to find better rates before negotiating.
3. Rejecting the dealer’s financing offers if they misrepresent your creditworthiness.

Avoid dealership financing tricks altogether by using PrivateAuto to connect directly with sellers and secure your own financing.

Five: Lying About Credit Scores Scam

Six: Lowballing Trade-In Values Scam

Dealers will purposely undervalue your trade-in, keeping the profit when they resell it for much more. That is just how they work.

Don’t get tricked into accepting their lowball appraisal. Research accurate wholesale values first on sites like KBB and Edmunds.

Get quotes from multiple dealers to compare against any suspiciously low trade-in offers.

And consider selling your car yourself to maximize your value rather than accepting an unfair deal. The best option? Sell your car directly to another buyer on PrivateAuto. Our transparent process ensures you get full market value without the dealer trying to rip you off.

Seven: Switching From Purchases To Leases Scam

Some dealers deliberately mislead customers about leasing versus buying. They’ll falsely claim a lease agreement will lead to eventual ownership after a specified number of payments have been made when in reality, you’ll never end up owning the car.

These tactics prey on uninformed buyers. Make sure you understand the key differences:

Buying means you own the car after paying the purchase price
Leasing means you must return the car after the term unless you pay a large purchase fee
Early lease termination triggers hefty penalties

Read all paperwork closely to confirm you’re buying the car, not leasing it.

Eight: Requiring Add-Ons To Get Pricing

Unscrupulous car dealers make required add-ons a condition of sale.

Here is what you should keep an eye out for:

Extended warranties
Service packages
Interior protection plans
Alarm systems
Wheel and tire packages

Walk away if a dealer tries to withhold advertised pricing unless you buy add-ons. And consider reporting coercive practices.

Nine: Yo-Yo Scam

Dealers use yo-yo financing scams to renegotiate purchase terms after buyers drive a car home. They falsely claim the agreed-upon financing fell through, then pressure the buyer to accept a rewritten contract with worse rates or a (larger) down payment.

Don’t get hooked by this ploy. Refuse to renegotiate—stand firm on the original financed terms or cancel the vehicle purchase.

On PrivateAuto, you shop for cars knowing you’ll never face tricks like yo-yo financing. We connect you with actual sellers, not middlemen trying to bait and switch. The deal you secure is the deal you get, with no shady renegotiating.

Ten: Monthly Payment Scam

Dealers hype monthly payments to divert focus from the total price. They stretch loans, lowball trades, and pack in backend fees to make payments seem low. Don’t get distracted by monthly figures.

Insist on transparency. Demand to see the full breakdown: sale price, trade-in value, add-ons, financing terms, fees, etc. If they won’t provide details, walk away.

On PrivateAuto, upfront pricing guarantees there are no hidden costs buried in the payment.

Why is it Better to Buy From a Private Seller?

Here are the advantages of skipping the dealership and buying from a private party:

Avoid extra fees. Dealerships charge documentation fees that range from $50 to over $1,000.
Get a better price by avoiding the markup associated with middlemen (dealers).
You drive the deal on your terms: PrivateAuto allows you to make offers and negotiate the best deal directly with the seller.
In some states, buying from a private seller means no sales tax. For example, Hawaii, Arizona, and Nevada charge sales tax on retail (dealership) car purchases, but not on private-party ones.

We do admit that dealers bring a certain amount of convenience that you don’t traditionally get when you buy from a private seller. That’s why we exist. PrivateAuto gives you dealer-like convenience in the palm of your hand.

How Can I Protect Myself When Buying a Car?

Unscrupulous dealerships continue to develop methods to trick prospective buyers. That’s one of the reasons we recommend transacting directly with private sellers—and why we created PrivateAuto for easy private-party deals.

PrivateAuto fights car buying scams with our secure, intuitive technology. We offer vehicle history reports with all premium listings and also have identity verification. These measures cut down significantly on fraudsters, but it always pays to be vigilant.

Don’t let anyone rush you into accepting a high purchase price sending payment until you are satisfied and ready to move forward. If someone gives you a high-pressure “act now or lose out” ultimatum, it’s best to walk away.

PrivateAuto helps by letting you schedule test drives securely and make payments instantly, securely, and with no transfer fees. With our transactional technology, you can navigate a private-party car purchase and come out ahead.

PrivateAuto is Your Answer

You’ll love how smooth and secure the car-buying process is when you use the PrivateAuto mobile app.

1. Browse used cars for sale by owner. Filter by location, vehicle type, or other criteria.
2. Make offers on vehicles you like (PrivateAuto lets you offer less than the asking price).
3. Message the seller with any questions, without giving your contact info.
4. Schedule the test drive while keeping your personal details private.
5. Electronically sign the bill of sale along with the seller.
6. Instantly send payment and take ownership of the car when the seller signs the title and gives you the keys.

Easy, right?

Dealership FAQ

Is the any way to avoid paying dealership fees?

To buy a car without paying dealer fees, don’t go to a dealer. Buy from a private seller and get way more cars for your cash.

Why are car dealerships so shady?

Here are some of the main reasons why many car dealerships have a reputation for being shady:

– High-pressure sales tactics: dealers rely on pushy salespeople who use deception and urgency to get customers to make quick decisions against their best interests. This creates an adversarial dynamic.
– Information asymmetry: dealers have more knowledge than buyers about things like pricing, financing, and add-ons. This allows them to more easily manipulate uninformed customers.
– Commission-based pay: salespeople earn on commission, incentivizing them to maximize sales at the customer’s expense. They have the motivation to upsell and increase profit through add-ons.
– Lack of pricing transparency: sticker prices rarely reflect what customers actually end up paying. Opaque pricing enables dealers to tack on items without the customer’s knowledge.
– Potential conflicts of interest: dealers make a lot from financing, warranties, and service packages sold at the point of purchase. This provides an incentive to push certain options that are not in the buyer’s best interest.
– Difficulty getting recourse: once a customer drives a car off the lot, they lose negotiating leverage. Dealers use this to avoid addressing grievances about problematic sales tactics.

Which fees can't be avoided when buying a car?

While specifics vary from state to state, there are certain taxes and fees you’ll owe regardless of whether you buy from a dealership or a private seller. Here’s what buyers commonly pay:

1. Title transfer fee.
2. Vehicle registration fee.
3. License plate fee (unless you’re in California or Minnesota). Some states include the cost of license plates in the registration fee, while others charge it separately.
4. State vehicle sales tax (unless you live in a tax-free state).
5. Local sales taxes, depending on your state, city, and county.

Where is the best place to buy a car privately?

There are tons of platforms for buying used cars online these days. Most serve as “meetingplaces” but lack transactional capabilities. They help you find a car to buy, but that’s about it. You and the seller are left to muddle through how to meet up, how to handle paperwork, and how to handle payment.

PrivateAuto is the only transactional marketplace that takes you through every aspect of the deal. Here are some of the benefits:

– Instant, fee-free, and secure payments via PrivateAuto Pay. Send up to $1M in the blink of an eye.
– In-app messaging keeps your contact info private.
– Test drive scheduling feature eliminates back-and-forth with the seller
– In-app electronic signing of the bill of sale protects you and gives you a legal record

Found your dream car on Facebook Marketplace, Craigslist, or eBay Motors? Our DealNow feature lets you start a deal on another site and finish it with PrivateAuto. Invite the seller to DealNow via a custom link you’ll create, and then enjoy our fast-track deal flow and proprietary infrastructure.

Start your transaction anywhere, and finish it with PrivateAuto.